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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: roguedolphin who wrote (91203)	12/5/2008 4:22:32 AM
From: mishedlo	2 Recommendations Read Replies (2) \| Respond to of 116555

Good News For Modern Man: Congressional Bickering globaleconomicanalysis.blogspot.com In a much welcome change of pace, I have good news to report. Unfortunately it is likely to be fleeting, so please enjoy it while it lasts. Congressional bickering is back in vogue as Dodd, Frank Warn Paulson May Not Get TARP’s Next $350 Billion. ... Mish

To: roguedolphin who wrote (91203)	12/5/2008 6:39:53 AM
From: The Vet	Respond to of 116555

China The central bank has shifted the central peg of its dollar band twice this week Shifting the central peg doesn't do a thing to the currency unless it is backed up by market action! Is there any evidence that the Chinese are actually buying US dollars and/or Euro and selling yuan in order to devalue the currency? With the US dollar getting stronger by the day, naturally all other currencies must weaken, so in effect all the Chinese are doing is going along with the "strong dollar" policy. If the US really wants to let market forces drive the currencies than they should first look at their own policies of intervention which distorts the markets. The US should be careful or they may get what they are wishing for. For the yuan to appreciate significantly the the Chinese would need to sell dollars in volume and the majority of those dollars are in US treasurys and agency bonds. China has already announced a plan to buy commodities, mainly metals to stockpile. This seems to be a wise move as it provides a store of value that can never go to zero and will always be able to be utilized in the future to counter supply shocks that are inevitable considering the rapidity of producers shutting down mines and cancelling projects due to financial constraints. It takes a lot longer to rebuild production than it does to destroy it.